You might often notice that gold prices notably vary across different states of India. For instance, there is a sharp difference in the gold price in Ahmedabad and that in Kolkata. This is mainly due to several factors influencing the gold rates in India. Keep reading to know them such that you can purchase this yellow metal at affordable rates.
Factors Influencing Gold Prices in Different Cities of India!
Below are some crucial factors that have a prompt effect on gold prices in India:
Gold, being a physical asset, incurs an extra cost of transportation from one city to another. Furthermore, transporters need to pay some add-on money to ensure maximum safety while transporting. Also, there are vehicle expenses, fuel costs and personnel expenses that can add to transportation charges.
Local Jewellery Associations
The gold prices of a city are decided by the local gold associations. This can result in the prompt variation of gold prices among Indian cities. For example, the gold price in Gujarat can vary from that of West Bengal due to differences in the local jewellery association of both states.
Quantity of Gold Purchased
There is a prompt difference in the quantity of gold that different states purchase. Purchasing this yellow metal in bulk can cost a lot less, resulting in lowering the cost of jewellery carved from it.
It has been found that South India purchases about 40% of the gold that India imports resulting in decreased prices. Furthermore, cities like Mumbai, Kolkata, Delhi, and Chennai purchase gold in bulk which lowers their cost.
Purchase Price of Gold
The purchase price of gold varies as there are several jewellers who stock gold when the cost is a lot lower. This allows them to sell gold jewellery at a lesser price to their customers. Furthermore, the difference in gold sources can also be a notable reason behind the variation in price.
Officially, jewellers have to pay an import duty of 10% and a 3% tax in India. However, if they purchase this yellow metal illegally, they will not have to pay this money, which considerably reduces the costs.
At this level, the demand and supply ratio also influences the gold rates to some extent. Also, inflation can be another reason behind increasing the costs of gold. Furthermore, a good monsoon usually increases the demand for gold which, in turn, influences its cost.
Hence, you can purchase jewellery or coins carved in this yellow metal when the prices are lower. Investment in gold is a smart choice as you can take a loan against it during financial emergencies.
Benefits of the Gold Loan!
The benefits of a gold loan are as follows:
- Availability of sumptuous loan amount: You can get a credit amount of up to Rs. 2 Crores against the jewellery that you are pledging. This is sufficient enough to meet your sudden financial necessities.
- Availability of part-release facility: You can release some of your gold jewellery on repaying the equivalent amount. This allows you to wear those during your family functions.
- Zero prepayment and foreclosure charges: On getting extra money as a bonus or gift, you have the flexibility to prepay or foreclose your credit. This is beneficial as you do not have to pay extra charges for it.
- Hassle-free application process: The process of applying for a gold loan is extremely easy and can be done in some simple, hassle-free steps. This helps you to access funds in case of emergencies.
Viewing these benefits appears to be advantageous while applying for a gold loan. However, prior to that you should make sure that you fulfill some of the essential eligibility criteria.
Eligibility Criteria for Gold Loan!
You will need to fulfil the following criteria to ensure that you stand eligible for a gold loan:
- Your age should be between 21 and 70 years.
- You need to be either a salaried or a self-employed individual.
Once you fulfill the above criteria, you can proceed with the application for a gold loan.
Steps to Apply for a Gold Loan!
You can follow some hassle-free steps to apply for a gold loan:
Step 1: Visit the official website of a financial institution.
Step 2: Move to the gold loan application page.
Step 3: Enter your personal and contact details accurately.
Step 4: Select your city of residence, state and the nearest branch of the financial institution.
Furthermore, you can keep in mind some crucial points before opting for a gold loan.
Things to Keep in Mind before Taking a Gold Loan!
Below are some crucial things that you should keep in mind before applying for a gold loan.
- Credit amount available: It is essential to check the credit amount that the lender offers against the gold jewellery that you are pledging.
- Additional charges associated: It is essential to check the extra charges that you will have to pay, which usually include documentation fees, processing fees, and loan overdue fees.
- Credibility of lender: Checking the credibility of a lender is essential to ensure that your gold jewellery is kept safe.
- Loan repayment schedule: You should check out the loan repayment schedule that the lender offers to ensure that you are comfortable with it.
Now that you know why the gold price in Ahmedabad is different from that of the gold price in Kolkata, you can make an informed approach towards its purchase. However, you should note that since the price varies across all cities it is difficult to determine which one offers the lowest rate.